Today IBM BlueMix, a cloud-based software development suite, was given its general release. In doing so, IBM recognizes two important trends. First, that leveraging the cloud for development makes as much sense as for sales enablement or marketing. Second, that the way enterprise software is priced is changing.

IBM’s pricing scheme for the new IBM BlueMix suite is a combination of pay-as-you-go and subscription pricing. This brings to developers using IBM tools the same financial advantages that exist for office productivity, CRM, HCM, and a host of other enterprise business applications. Subscriptions and pay-as-you-go, where each month a credit card is charged for a license, allows small organizations and teams to use software that typically would be too expensive to purchase outright. These are more flexible plans as well, allowing companies to adjust licenses quickly in order to accommodate team changes. This is especially advantageous for software development organizations where contractors make up a significant portion of the workforce. Even large companies will want to embrace this pricing model since it shifts CAPEX spending to OPEX and creates financial flexibility.

For big software companies such as IBM, this is clearly a departure. In fact, it represents a different way of thinking about pricing. Most enterprise software vendors still structure deals with upfront license purchases that require a big capital investment and a yearly maintenance fee. Cloud software has upended that model, especially over the past three years. The problem is not customer acceptance but recalcitrant sales organizations. It’s easy to understand why that might be; salespeople used to making money on megadeals aren’t yet comfortable with revenue that trickles in over time. Subscription and pay-as-you-go is a paradigm shift for enterprise salespeople. That IBM is adopting this model for an important new software products such as IBM BlueMix is a testimony to Big Blue’s evolution as a cloud software provider.

IBM BlueMix is a good product with which to introduce this type of pricing. As enterprise software vendors have switched to subscription pricing, they have been battered by the financial markets for perceived drops in revenue. The revenue from cloud products fits a different model than traditional pricing. Because of this, revenue shifts from on-premises to cloud have been painful for many large ISVs. With IBM BlueMix, financial analysts won’t have anything to compare to and the proper revenue model will be applied from the start.

This is a bold move for IBM. They have priced an important product in a new and disruptive fashion, one calculated to blunt the force of a new crop of competitors such as Cloud9 and CodeAnywhere. I’m hoping the IBM BlueMix team can hold off the inevitable pressure to conform to old models.

Back in April, Neuralytix published my report on the utility of enterprise social networks for internal collaboration. At the time, I looked at Microsoft’s enterprise social network product, Yammer, but not as a part of the Office 365 suite of products. That was how the criteria for the report worked out. In order to have an apples to apples comparison with other products in the category, such as Jive or SAP Jam, I had to consider Yammer by itself and not as part of the Office product line. The model took into account integrations with other applications but the enterprise social networks highlighted in the report had to stand on their own. Yammer’s middling standing in our model didn’t dissuade Neuralytix from adopting the Office 365 suite including Yammer, SharePoint Online, OneDrive for Business, Lync, and the Office applications. Ultimately, analysts have to publish documents and the Microsoft Office line of productivity applications is the de facto standard for writing large format documents. Recently, the online versions of Word, Excel, and PowerPoint have evolved to the point that they are a better replacement for Google Docs, can function well alongside the more full featured desktop versions, and have some pretty decent collaborative writing functions. That made the Microsoft package a good deal for a company such as ours.

It’s been, however, a bit of a struggle adapting to the new suite of collaboration applications. Part of the problem is that we are comfortable in our existing work patterns. I expected this to be the case since I seen others struggle with this problem for years now. Another problem that was expected, though still irritating, was the lack of integration of Yammer with the rest of the suite. We can, for example, embed a Yammer feed into a SharePoint Site but not the other way around. We like the freeform collaboration and need the structured collaboration. It would be much better if we could make them work together better than they do.

Unexpectantly, the biggest issue has been the confusion caused by the considerable feature overlap between products. Where should we carry out conversational communication – Yammer or SharePoint? The answer is both but they are called something different in each. What should we use to send an instant message, Lync or Yammer? Both again. Should I share files in Yammer, SharePoint, or from OneDrive for Business? That depends on what you are trying to accomplish. Does it make more sense to send an email or start a private conversation in Yammer? Once more, it depends.

Here was my advice to my colleagues here at Neuralytix on how to use these applications. I hope this helps others out as well:

SharePoint – for structured activities. Sites are fairly static but that’s ok. Think of them as places for structured sharing. This is where we have shared tasks, workflows, and document management. SharePoint also makes sense for static content such as internal blogs.

​Yammer – unstructured conversations and sharing. Yammer is excellent for communicating in a conversational manner. It’s especially good for keeping multi-person emails to a minimum and provides a better experience for those conversations. You can share files, announcements, polls, etc. The messaging features are also useful for keeping email chatter to a minimum. It’s like Facebook messaging – if you are online the conversation is like IM; if offline it’s more like an email.

Lync – this is a unified communication application. It provides presence (“I’m available”, “Busy”), video and audio calls like Skype, and IM. The difference between Lync and Skype is that Lync is a private network. There are on-premises versions that provide complete telephone and web conferencing including connecting outside the company. You can actually buy a VoIP phone for Lync. We are using the cloud version so for us it’s more like internal Skype.

OneDrive for Business – it’s actually a private SharePoint Site with a document repository. It syncs like Dropbox and is primarily for storing personal business files. The personal files can be shared with others just as files can be shared on SharePoint and Yammer. Unlike the consumer version of OneDrive (which is a Dropbox competitor), OneDrive for Business uses SharePoint document management which means you can check-in and check-out documents and even create workflows for documents.

This type of advice shouldn’t be necessary. Microsoft should rationalize the applications so that any particular feature is delivered by one application. The idea of a series of interlocking but narrow applications is gaining favor amongst consumers for reasons of simplicity and ease of use. This is beginning to spill over into the business world. The single identity shared between SharePoint, Lync, Outlook/Exchange, and the Microsoft Office Productivity applications is great example of where integrations works. The lack of that integration with Yammer is an equal example of how it doesn’t work. Ulitmately, with so many versions of the same feature, it makes it hard to pivot from one communication mode to another since you have to think about applications instead of communicating.

Microsoft Office 365 is a great set of applications for supporting collaborative work. It could be the best of all collaboration tools if Microsoft would shore up the integration and lose the overlap.